Note 13 - Segments

9 Months Ended

Aug. 27, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 13: Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. Segment operating income is identified as gross profit less SG&A expenses. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of Project ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs.

We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a "where-used" basis as financial performance is assessed at the total operating segment level.

The table below provides certain information regarding net revenue and operating income (loss) for each of our operating segments. 

	Three Months Ended
	August 27, 2022					August 28, 2021
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	424,978	$	47,470		$	369,439	$	29,652
Engineering Adhesives		378,264		39,776			342,300		34,087
Construction Adhesives		137,988		6,391			115,091		3,339
Total segment	$	941,230	$	93,637		$	826,830	$	67,078
Corporate Unallocated1		-		(5,683	)		-		(7,625	)
Total	$	941,230	$	87,954		$	826,830	$	59,453

	Nine Months Ended
	August 27, 2022					August 28, 2021
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	1,252,405	$	122,950		$	1,069,922	$	98,493
Engineering Adhesives		1,137,587		115,266			1,000,337		96,580
Construction Adhesives		400,977		22,032			310,348		4,974
Total segment	$	2,790,969	$	260,248		$	2,380,607	$	200,047
Corporate Unallocated		-		(27,780	)		-		(23,105	)
Total	$	2,790,969	$	232,468		$	2,380,607	$	176,942

¹ Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include charges that are not allocated to the Company’s reportable segments. 

The table below provides a reconciliation of operating income to income before income taxes and income from equity method investments:

	Three Months Ended						Nine Months Ended
	August 27,			August 28,			August 27,			August 28,
	2022			2021			2022			2021
Operating income	$	87,954		$	59,453		$	232,468		$	176,942
Other income, net		6,559			6,150			12,701			25,899
Interest expense		(23,450	)		(19,396	)		(61,475	)		(59,699	)
Interest income		2,139			2,520			6,170			7,709
Income before income taxes and income from equity method investments	$	73,202		$	48,727		$	189,864		$	150,851

We view the following disaggregation of net revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Three Months Ended August 27, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	261,751	$	165,398	$	106,169	$	533,318
EIMEA		114,186		111,734		23,519		249,439
Asia Pacific		49,041		101,132		8,300		158,473
Total	$	424,978	$	378,264	$	137,988	$	941,230

	Three Months Ended August 28, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	210,589	$	127,683	$	103,475	$	441,747
EIMEA		108,626		121,905		4,958		235,489
Asia Pacific		50,224		92,712		6,658		149,594
Total	$	369,439	$	342,300	$	115,091	$	826,830

	Nine Months Ended August 27, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	737,689	$	465,285	$	321,167	$	1,524,141
EIMEA		351,983		361,485		58,450		771,918
Asia Pacific		162,733		310,817		21,360		494,910
Total	$	1,252,405	$	1,137,587	$	400,977	$	2,790,969

	Nine Months Ended August 28, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	594,071	$	367,260	$	274,502	$	1,235,833
EIMEA		312,908		345,249		16,191		674,348
Asia Pacific		162,943		287,828		19,655		470,426
Total	$	1,069,922	$	1,000,337	$	310,348	$	2,380,607